Category: Investors

Net Operating Income (NOI) is an important figure to know when purchasing income property.  It is simply gross annual rental income minus expenses (GROSS ANNUAL RENTAL INCOME – EXPENSES).  What can sometimes not be so simple is defining what qualifies as an “expense.”  Here is a list that you can use to define your expenses: … Continued

To value apartment buildings, many investors use the direct capitalization technique.  While it is mainly used for commercial real estate, it can also be used on 2-4 unit properties.  The formula is this: V = NOI / R V = VALUE NOI = NET OPERATING INCOME R = CAP RATE The Capitalization Rate (Cap Rate) … Continued

When purchasing income property, there are many ways of looking at it to see if it is a good investment.  It’s probably a good idea to look at more than just one formula before deciding to purchase a property.  One formula you should at least take a look at is the Cash on Cash Return.  … Continued